How To Save Money on Gasoline Costs?

One of the most common financial complaints that I hear is that the price of gasoline is too high. I agree that it’s tough to see higher fill-up costs at the pump, but I sometimes wonder if some consumers doth protest way too much? Most people have bigger expenses than gasoline to worry about and gas costs are one of easiest expenses to reduce.

Gas prices are visible and frequent

If you own a car and use it regularly, then you will probably be familiar with market gas prices since you probably buy gas at least once or twice a month (or a lot more frequently). Because gas is a commodity and is sold in standard unit prices, it’s very easy to compare the price with other gas stations and with the price you paid last week. For most other consumer goods, the unit costs are not as quite as transparent and there are different brands to consider.

How much of your budget goes towards gasoline costs?

This will vary widely for different people but in my case we spend about 2% of our net pay on gasoline. This is probably on the low side since we don’t use our car everyday. Groceries, on the other hand, take up about 16% of our budget. Keep in mind that our grocery budget includes a lot of common household items such as diapers, kitty litter etc.

My point is that if I want to cut back on our expenses or even just complain about them, I should focus on what’s important. Our gasoline bill could double and it wouldn’t make a big impact to our budget. If our grocery bill doubled then we would be hurting. I suspect the average consumer has many other expenses which are much bigger than gasoline costs.

How to lower your gas costs

Here are a couple simple ideas on how to lower your gas costs. There are many other lists on the internet which are a lot more comprehensive but I’ve tried to stick with a few solid ideas that if applicable, will make a significant difference.

Drive less – If you can reduce your driving then you will reduce your gas consumption by a proportional amount. This can accomplished by planning your trips better – if you drive to the grocery store seven times a week then do some planning and cut the trips down to twice a week. If you can carpool, walk, ride or take transit to work instead of driving then you will save money.

Drive slower – the faster and more aggressively you drive, the more gas you burn. No more racing!

If you can’t beat ’em, join ’em

Consider investing in oil related companies. The stock prices won’t be perfectly correlated to your gasoline costs but over the long run if the price of oil keeps rising then your stocks (I would look into buying an exchange traded fund) should perform well.

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Although I tend to drive more in the summer (due to weekend trips) but I don’t think the price of gas is that ridiculous. As others have pointed out, other parts of the world have had consistently higher costs. Most importantly, I think it’s important that we pay a high price as it will get more people thinking about alternative modes of transportation that are not only more financially-friendly, but also environmentally-friendly.

Pretty balanced post, and one that probably speaks to a lot of urbanites. I’ll admit that I mostly scan past any posts that mention gas, as I don’t drive, but can’t ignore the impact it’s having on our projects at work. My husband is moving his office from Richmond Hill to Toronto next week which will help our household bottom line too (or allow him to buy more marlboros, not sure yet how that’ll shake out). The frugal dad post you linked is interesting.

Unspending – good point – gas costs in Europe are much higher than here for example.

Guinness – smoking is bad for your husbands health!

Patrick – yes, less weight is a good one (especially if it’s off the occupants!)

Mike – you are right that rising gas prices affect almost every materal good but the article was focussing more on gas consumers reaction to the price they see when they fill up their car. Ironically the effects you mention might be costing us more than the extra money to fill up but because we don’t see those extra costs directly, it’s like they don’t exist.

Cash Canuck – of course it’s not wise to invest at the top of the cycle but I have no idea if it is indeed the top of the cycle. Regardless, the point of buying oil companies is for a hedge – if gas prices stay high then the higher share prices/dividends will help pay for your higher gasoline costs – if the prices drop then the money you lose on the stocks will be made up by the lower gas prices.

I got the hedge idea from Derek Foster – although I think it’s an interesting idea I wouldn’t bother doing it myself.

I’ve been telling this to people for years. Not only is gas a small percentage of overall expenses, it’s typically a percentage of the expense of operating a car. Especially in Canda, where harsh winters aren’t very forgiving of cars that are “cheap” to operate.

Here in the US, the gas price “crisis” is actually a little more significant because of the number of people who are dependent on cheap gas to maintain their lifestyles.

It’s one thing to live 30 minutes from work in Winnipeg, you’re still probably only traveling 10 miles. But in the US, 30 minutes from the office typically means 20+ miles. And they’re driving a heavy vehicle and they operate two cars.

People are raging against gas prices, but the real problem is simply that they can no longer afford to be as wasteful.

A large car like the Grand Prix (average size out here), weighs 3,500 lbs. Put a person and gear (say 250 lbs) and that’s only like 6% of the overall weight. That means that 94% of the gas is used in moving the car not you.

Living 30 miles from the office is very expensive in terms of time, but it’s also a very long way to drag a car.

On one level, the rising gas prices get to people because they’re highly visible. But on a deeper level, they’re a reminder that we need to start rethinking the way that we build cities and communities. Of course, it’s easier to complain about prices than it is to yell at politicians to find a better way to build cities.